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Tolerance levels are diminishing

The success of the xenophobic and far-right Alternative for Germany party in Sunday’s election for the state legislature in Mecklenburg-Western Pomerania in east Germany is hardly good news to German Chancellor Angela Merkel and the Christian Democrats, nor to Europe and the Greek government. Merkel suffered a mighty defeat in her own constituency, as a reaction, primarily, to her migration policy; Europe is witnessing yet another Le Pen-style party making its presence felt within Germany; while Athens ought to be feeling even greater insecurity now, following clear indications that the tolerance levels of its creditors are dropping considerably.

News stories relating to the ineffective management of the migration crisis have already reached Greece and there might be more bad omens on the way.

There are those estimating that a bailout subtranche of 2.8 billion euros, which is still pending following the first review of the Greek program, will not be dispersed if the Greek side does not implement a series of much-delayed prior actions.

The next Eurogroup meeting will determine whether or not these estimates are correct but for the time being, this conclusion is also based on statements made by EU officials.

There is one issue where the attitude of the country’s lenders and partners is crystal-clear. This is the case of ELSTAT and the new charges brought against the Greek statistical agency’s former chief, Andreas Georgiou.

Clearly the well-publicized and strong reaction by several high-ranking Commission officials forced the government into a tactical retreat.

Following an initial display of bravura by Finance Minister Euclid Tsakalotos, who forwarded a reply, Alternate Finance Minister Giorgos Houliarakis told Parliament that the administration did not question the figures upon which the August 2015 deal – in other words, the so-called third bailout – was based, adding that the government guaranteed and safeguarded the agency’s independent character.

This new U-turn led to the expected rumbles within the government and certain officials “leaking” that the Houliarakis statement related solely to the figures given for 2015, not those compiled in 2010 for 2009. In other words, they pointed out that the Georgiou case was still open. They forget, however, that to begin with, this is a matter of principle – i.e. a red line – for Europe and the IMF, secondly that the so-called third bailout is essentially a continuation of the first two (there is only one bailout) and, thirdly, that they don’t have the luxury to accept they were wrong to allocate so much money to Greece when, by accepting the Greek statistics, they could have given so much less. Following Sunday’s election result and in view of next year’s general elections in Germany, the creditors’ tolerance levels are diminishing.